Centives

Perhaps we shouldn’t worry so much about technological progress leading to widespread unemployment. Why, just look at the washing machine, wrote Justin Fox.

• In 1766 the man credited with inventing the washing machine wondered whether his invention would put clothes washers out of a job.
• He concluded that it would not – his washing machine would increase the number of clothes they washed, as they could now handle more – and with less strain on their bodies.
• He was proved right – as the capacity of washing machines increased, people started buying more clothes, creating more demand.
• And younger, poorer people started to outsource their laundry to clothes washers, who had lowered their price per article of clothing.

Read more about the history of the humble washing machine on Bloomberg.

Via: Marginal Revolution

Beaches are worth billions writes The Economist:

• Most of the uses of sand are familiar – concrete, electronics, and fracking among others.
• But sand is also used in geopolitics. The tiny island state of Singapore has poured incredible amounts of sand into the ocean to make it’s landmass 20% larger.
• Climate change is also requiring coastal communities to pour sand on the beaches; prevent rising sea levels from swallowing homes.
• While sand appears plentiful most of it – like that of the Saharan desert – isn’t particularly useful as it is too fine.
• Sand mines need to be located next to demand centers, as it’s too heavy to transport long distances efficiently.
• This has led to sand mafias that barter in illicitly obtained market grade sand. According to one estimate this black market is worth $2.3 billion a year.

Read more on The Economist.

Bill O’Reilly, the famous news personality, has been ousted from Fox News due to multiple sexual harassment allegations. Michelle Castillo looked at some of the numbers involved:

• O’Reilly brought in $325 million in ad revenue alone last year.
• In return he had a contract worth $20 million a year – meaning Fox News made a 1,500% return on investment on him.
• In that context it becomes clearer why Fox News helped pay some of the $13 million to settle the harassment lawsuits.
• After the settlements came to light most major advertizers deserted the show, making it difficult for Fox to justify the economics of keeping it on air.
• Some have predicted that Fox could lose up to $100 million a year because of the O’Reilly saga.
• Others disagree, saying that the network is not reliant on individual personalities. When Megyn Kelly – another famous news personality – left, the network’s ratings actually went up.
• Shares in Fox News’ parent company dropped less than 1% on the day of the announcement.

Read more on MSN.

A reality TV star is now President of the United States. Andy Martino wrote about how this has reverberated across television – especially on Keeping up with the Kardashians:

• Keeping up with the Kardashians was thought of as vapid, mindless, and asinine entertainment when it first debuted.
• Yet season 13 is going to cover Kim Kardashian’s violent robbery, as well as the continuing story of Bruce Jenner’s transition into Caitlyn.
• Along the way the show has driven focus on issues that have gone onto dominate political discussion – like transgender rights.
• The shift towards more serious subjects has helped the Kardashians stay relevant and popular.
• This is in stark contrast to TV stars that haven’t managed to adapt to a changing political climate – like Jimmy Fallon whose easygoing comedy is losing out to Stephen Colbert’s serious political satire.

Read more on The Outline.

The Economist reviewed “The Great Leveller: Violence and the History of Inequality from the Stone Age to the Twenty-First Century” by Walter Scheidel:

• Going back to the Stone Ages, only four things have been found to consistently reduce inequality. First, an epidemic like the Black Death.
• Second, the collapse of a state – like the end of the western Roman Empire.
• Third, a revolution, like the ones the Russians had in the 20^th century.
• Fourth, a war of mass mobilization.
• Conversely financial crises may end up increasing inequality. Policies like land reform or debt relief were found to have little effect – unless violence was involved.
• Violence isn’t required to reduce inequality but it helps. Bombs destroy buildings and machines owned by the rich. And to fight wars governments have to tax those who have the most money.
• The comradery that wars create also drive up trade union membership, further mitigating inequality.
• All this means that inequality may only get worse. Plagues seem less likely. And in a world of nuclear weapons it’s unclear that a war of mass mobilization will ever be required.
• On the bright side while inequality within countries might march inexorably upwards, that between countries has fallen.

Read more on The Economist. Get the book here.

Tyler Cowen wrote about the economics of speedbumps:

• It’s weird that in today’s day and age, we’re using speedbumps – essentially stone aged technology – to regulate traffic.
• They’re a very public symbol that an area values safety over convenience.
• But they increase carbon emissions.
• They can also slow down the response of emergency vehicles, making their net contribution to public safety debatable.
• And cars sometimes swerve around them, or sharply accelerate after crossing one, possibly leading to more harm than good.
• So are speed bumps worth it? If they were then neighbourhoods that had them should have higher property values – since they were safer – than those that didn’t.
• Yet there is no clear evidence that speedbumps increase property values.
• But the private sector continues to invest in them, in places like mall parking lots. This indicates that there is a positive rate of return on speedbumps.

Read more on Bloomberg.

In the hours before International Women’s Day, a bronze statue called “Fearless Girl” was installed directly in front of Wall Street’s famous “Charging Bull” statue, without clearance or permission. Response to the statue was very positive (with certain exceptions). But now the creator of the Charging Bull statue – who in 1989 had also installed his sculpture without permission – wants Fearless Girl taken down. A case of hypocrisy emblematic of what women in multiple industries – but especially finance –deal with? Christina Cauterucci surprisingly didn’t think so:

• Charging Bull was set up soon after the 1987 stock market crash and was meant to represent a booming economy.
• Fearless Girl defiantly stares at the bull, symbolizing the sexual harassment that women deal with.
• But Fearless Girl has changed the meaning of Charging Bull. Instead of hopes for economic growth, the bull now symbolizes oppression against the innocent.
• Federal Law prohibits changing the meaning of a work in a way that could damage an artist’s reputation.
• But removing Fearless Girl would be a symbol too – that women shouldn’t occupy space on Wall Street.
• Some believe that Fearless Girl is a poor symbol for feminism. Instead of a strong confident woman, the sculptor went with a small powerless girl.
• Yet others are critical that it was commissioned to draw attention to the disparity in the number of women on executive boards by State Street – a company that only has three women on a board of 11.

Read more on Slate.

Dan Nosowitz delved into the past and present of how car models are named:

• American car names have typically reflected current trends. In the 1930s and 1940s “the Zephyr”, “the Commander”, and, the retrospectively unfortunate “Dictator” were marketed.
• With the advent of the space race in the 70s and 80s Americans were buying “Comets”, “Meteors”, and “Satellites”.
• When Mercedes Benz entered the American market, it differentiated itself as a maker of luxury cars. Its habit of using alphanumeric code names (e.g., “Mercedes-Benz 770K”) began to be emulated by anyone trying to make high-end cars.
• The trend continues. Today the rich can choose among the Lexus LS500, Volvo S90, and Mercedes CLS550.
• Meanwhile most Americans will purchase a Honda Accord or Toyota Highlander.
• Using an alphanumeric code name for a vehicle keeps the focus on the fact that the car is a Mercedes Benz – the model is unimportant – helping to enhance the automaker’s brand.
• It also helps preserve the value of a car by mitigating the risk of anachronistic car names. Who, after 1939, would have wanted to purchase “The Dictator”?

Read more on Atlas Obscura.

All the additional safety features cars are coming with are perversely making them more expensive to insure wrote Christina Rogers and Leslie Scism:

• Accident prevention systems require advanced sensors, microprocessors and other hardware. If an accident takes place, they’re expensive to replace.
• These sensors are often located in places like the bumper or on external mirrors – areas most likely to get damaged in an accident.
• For example: it costs $166 to replace a normal side mirror on a 2015 Mercedes-Benz ML350, but $925 to replace one with anti-collision technology.
• Insurers are passing this cost on. When one buyer replaced a 2015 model of a car with a 2017 version he saw his insurance quote increase by 20%.

Read more on The Wall Street Journal

Via: Marginal Revolution

Charisse Jones and Roger Yu looked into the conditions that allowed the now infamous Pepsi ad starring Kendall Jenner to be aired:

• The ad was made by Pepsi’s in house marketing team rather than a specialist agency. This strategy cut costs and speeds up production, but in-house employees are less likely to critique an ad.
• To cut costs the production team might also have skipped testing out the ad with focus groups.
• And like in many industries, advertising teams often lack diversity, meaning important racial perspectives get lost.
• That said, the amount of attention the ad has gotten might ultimately be a boost for Pepsi.

Read more on USA Today.